Do revisions improve forecasts?

This study examines the effects of forecast revisions on accuracy using economic forecast survey data. Forecasts on the GDP growth rate and the short-term bond yield have been more extensively revised than forecasts on the inflation rate, the long-term bond yield, and the yen/dollar exchange rate. This study finds that revision produces significantly better forecasts for the short-term interest rate and the exchange rate, but not for the GDP growth or inflation rates. For the latter, the additional information available since the original forecasts appears to make little difference. The results on macroeconomic forecasting are in disagreement with an earlier finding that recently revised forecasts are superior to the originals.